Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Values of Financial Instruments [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

10. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts, estimated fair values and level within the fair value hierarchy of financial instruments were as follows as of March 31, 2013 and December 31, 2012 (dollars in thousands):

	Level in Fair Value Hierarchy		March 31, 2013				December 31, 2012
			Carrying Values		Fair Values		Carrying Values		Fair Values
Financial assets:
Cash		Level 1	$	1,395	$	1,395	$	1,576	$	1,576
Cash equivalents		Level 2		113,382		113,382		134,427		134,427
Securities available for sale		(1)		140,013		140,103		138,314		138,314
FHLB stock		(2)		11,961		11,961		11,961		11,961
Loans, net		Level 3		996,921		992,391		1,012,512		1,004,541
Bank owned life insurance		Level 2		50,386		50,386		50,048		50,048
Accrued interest receivable		Level 2		3,899		3,899		3,874		3,874
Financial liabilities:
Deposits		Level 2		1,092,790		1,094,380		1,135,204		1,135,614
Repurchase agreements		Level 2		68,744		68,744		64,765		64,765
FHLB advances		Level 2		35,000		34,977		35,000		35,000
Subordinated debentures		Level 2		32,990		32,927		32,990		32,943
Accrued interest payable		Level 2		1,730		1,730		2,314		2,314
Interest rate swap		(1)		998		998		1,113		1,113

(1) See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

(2) It is not practical to determine the fair value of FHLB stock due to transferability restrictions.

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable, bank owned life insurance, demand deposits, repurchase agreements, and variable rate loans and deposits that reprice frequently and fully. For fixed rate loans and deposits and for variable rate loans and deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of subordinated debentures and Federal Home Loan Bank advances is based on current rates for similar financing. Fair value of the interest rate swap is determined primarily utilizing market-consensus forecasted yield curves. Fair value of off-balance sheet items is estimated to be nominal.